HOME Investment Partnerships Program and Amendment to NOFA for FY 1994 for Indian Applicants Under the HOME Program; Interim Rule and Notice DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

SUMMARY: This interim rule amends the existing interim rule for the

HOME Investment Partnerships Program by making it conform with program

changes enacted in the Multifamily Housing Property Disposition Reform

Act of 1994 and by making a number of additional clarifying changes.

DATES: Effective date: September 26, 1994, except amendments to part 92

effective October 26, 1994 through June 30, 1995.

Comments due date: Comments on this interim rule must be submitted

on or before October 25, 1994.

ADDRESSES: Interested persons are invited to submit comments regarding

this interim rule to the Rules Docket Clerk, Office of General Counsel,

Room 10276, Department of Housing and Urban Development, 451 Seventh

Street, S.W., Washington, D.C. 20410. Communications should refer to

the above docket number and title. A copy of each communication

submitted will be available for public inspection and copying between

7:30 a.m. and 5:30 p.m. weekdays at the above address. FAXED comments

will not be accepted.

FOR FURTHER INFORMATION CONTACT: Mary Kolesar, Director, Program Policy

Division, Office of Affordable Housing Programs, 451 Seventh Street,

S.W., Washington, D.C. 20410, telephone (202) 708-2470, TDD (202) 708-

2565. (These are not toll-free numbers.)

SUPPLEMENTARY INFORMATION:

I. Paperwork Reduction Act Statement

The information collection requirements for the HOME Investment

Partnerships Program have been approved by the Office of Management and

Budget, under section 3504(h) of the Paperwork Reduction Act of 1980

(44 U.S.C. 3501-3520), and assigned OMB control number 2501-0013. This

interim rule does not contain additional information collection

requirements.

II. Background

The HOME Investment Partnerships Program (HOME) was enacted under

title II (42 U.S.C. 12701-12839) of the Cranston-Gonzalez National

Affordable Housing Act (NAHA) (Pub. L. 101-625, approved November 28,

1990). Implementing regulations for the HOME Program are at 24 CFR part

92.

The Housing and Community Development Act of 1992 (HCDA 1992) (Pub.

L. 102-550, approved October 28, 1992) included a substantial number of

amendments to the HOME program. These amendments were implemented in

rules published on December 22, 1992 (57 FR 60960), June 23, 1993 (58

FR 34130), and April 19, 1994 (59 FR 18626).

The Multifamily Housing Property Disposition Reform Act of 1994

(MHPDRA) (Pub. L. 102-233, approved April 11, 1994) included an

additional number of amendments to the HOME Program. The following

discussion, arranged according to the sequence of the MHPDRA sections,

summarizes the changes made to the HOME program regulation in this

interim rule.

Section 201 of MHPDRA amends section 104(2) of NAHA to allow

governors to designate State agencies or instrumentalities of the State

(e.g., housing finance agencies or housing authorities) to administer

HOME Program funds. Prior to this change, a subrecipient agreement was

required between the State and its instrumentality to administer the

HOME funds. This amendment provides greater flexibility to designate

such an organization to run the program and the definition of State in

Sec. 92.2 is amended accordingly.

Section 202 of MHPDRA amends section 214(1) of NAHA which required

that at least 90 percent of the HOME funds invested in rental housing

be for units occupied by families below 60 percent of median income.

This amendment changes the requirement to say that at least 90 percent

of the units assisted, and in the case of tenant-based rental

assistance, the families assisted be below 60 percent of median income.

This amendment, as implemented through Sec. 92.216, will simplify the

targeting requirement since it is easier to count units than funds

invested.

Section 203 of MHPDRA amends section 215(b) of NAHA in two ways.

The first change is the elimination of the ``first-time'' designation

for homebuyers. The HCDA 1992 amendment broadened the eligibility of

``first-time'' homebuyers to include almost all low-income homebuyers.

By eliminating the designation, participating jurisdictions will not

have to document the statutory category under which income-eligible

homebuyers qualify. The change will also conform the HOME Program to

the CDBG Program, which does not restrict homebuyer assistance to

first-time homebuyers.

The second change would permit participating jurisdictions to use

funds recaptured from the sale of homebuyer units for any eligible HOME

cost. The provision formerly limited the use of the recaptured funds to

assistance for additional first-time homebuyers. This change will

effect the use of current and future recaptured funds. Conforming

changes have been made to Secs. 92.2, 92.61(b)(4), 92.150(b)(4),

92.205(a)(1), 92.206(b), 92.214(a)(7), 92.254(a), and 92.354 to

implement the new homebuyer requirements.

Section 204 of MHPDRA amends section 220(a) of NAHA to effect a

flat 25 percent match on all funds drawn down for HOME projects or

tenant-based rental assistance. This provision eliminates the 30

percent match of funds drawn down for new construction. This new, lower

match rate will be applied to all Fiscal Year 1993 funds currently

expended or future year funds drawn down for eligible HOME activities,

and Sec. 92.218 has been changed accordingly.

The new environmental provisions make three amendments to section

288 of NAHA which are implemented for the HOME Program by Sec. 92.352,

for Subpart M--HOME Funds for Indian Tribes at Sec. 92.633, and also by

revisions to HUD regulations in 24 CFR part 58, which govern the

assumption of environmental responsibilities by recipients under the

HOME program and other programs with similar statutory authority for

recipient environmental reviews. The first amendment provides for

assumption of HUD's environmental review responsibilities by all

jurisdictions receiving assistance under the HOME Program, not just

participating jurisdictions, as well as Indian tribes and insular

areas.

The second amendment to Section 288 makes HOME environmental review

procedures consistent with the procedures under the Community

Development Block Grant and McKinney Act homeless assistance programs

with regard to States' responsibilities. Where a State makes funds

available to a unit of general local government, the State would

perform the release of funds function otherwise performed by HUD, and

local governments would assume the responsibility for performing

environmental reviews. To the extent that the State would be using the

HOME funds directly, HUD would approve the request for release of

funds.

Third, a new paragraph, Sec. 58.77(d), is added to part 58, which

adds the new statutory provisions for monitoring, training, and

termination or suspension of assumption of review responsibilities.

The amendments to 24 CFR part 58 in this interim rule contain

changes consistent with the above changes in part 92. In addition,

Section 305 of MHPDRA amends Section 1011 of the HCDA 1992 to provide

that for purposes of environmental review, decisionmaking and action,

certain grants for lead-based paint hazard reduction and abatement

shall be treated as assistance under the HOME Investment Partnership

Act and shall be subject to HUD's regulations implementing section 288

of that Act. In other words, recipients of these lead-based paint

grants will assume environmental responsibilities to the same extent as

recipients under the HOME program and will be subject to 24 CFR part

58. The grants covered by this provision are lead-based paint hazard

reduction grants under section 1011, as well as grants to States and

units of general local government for abatement of lead-based paint and

lead dust hazards pursuant to title II of the Departments of Veterans

Affairs and Housing and Urban Development, and Independent Agencies

Appropriations Act, 1992 (approved October 28, 1991, Pub. L. 102-139),

(92 App. Act). Accordingly, Sec. 58.1(c) is amended to reflect the

applicability of part 58 to these lead-based paint grants.

Section 208 of MHPDRA creates a new section 290 of NAHA which

permits the Secretary to waive certain statutory provisions for PJs

that are in federally-declared disaster areas under title IV of the

Robert T. Stafford Disaster Relief and Emergency Assistance Act and

that will be using HOME funds to address damage. However, the Secretary

may not waive requirements related to public notice of funding

availability, nondiscrimination, fair housing, labor standards,

environmental standards and low-income housing affordability. With

regard to low-income housing affordability, projects must meet the

occupancy rent and periods of affordability provisions outlined in

Secs. 92.252 and 92.254. It is the Department's intent to provide

waivers on other HOME requirements based on the circumstances of a

particular disaster, tailoring the waivers to the needs of the

participating jurisdiction.

The Department is making a technical correction to

Sec. 92.211(a)(2) to reflect the 1992 amendments to the Section

6(c)(4)(A) of the Housing Act of 1937. Selection policies and criteria

for a tenant-based rental assistance program funded by HOME are

considered reasonably related to the Federal preference rules if, at

least, 50% of the families would meet the Federal preferences. The

change reduces the proportion of families required to meet the Federal

preferences from 70% to 50%.

The Department is amending Sec. 92.254(a) to include the

requirement that homeownership under a lease-purchase agreement, in

conjunction with a homebuyer program, must occur within 36 months. This

addition serves to integrate policy guidance enunciated previously to

the field into the rule. The Department believes that 36 months should

be ample time for a homebuyer to resolve any outstanding credit

problems, to complete homeowner education courses, or build up

sufficient equity for homeownership (especially since HOME funds can be

used for down-payment assistance). Lease-purchase arrangements in

connection with homebuyer programs are not subject to the same

occupancy and rental restrictions as are HOME rental projects and,

therefore, the Department is concerned that any longer lease period

would be contrary to the statutory requirements governing HOME rental

projects. The Department would appreciate any comment regarding this

regulatory amendment, whether the 36 month period is too long or not

long enough or whether the time period should be determined by the PJ.

The HOME Program regulations published April 19, 1994 made a change

to Sec. 92.252(a)(2) designed to prevent ``Low HOME Rents,'' as

calculated, to be higher than ``High HOME Rents'' as a result of fair

market rents in some regions. The change was made to correct this

problem by indicating that if the low HOME rents were higher than the

high HOME rents that the figure for the lower rent would be used for

all HOME units. That change, however, has been interpreted as limiting

the method for calculation of low HOME rents, which was not intended.

Revisions have been made to Sec. 92.252(a)(2)(iii) to clarify this

point.

This interim rule also makes clarifying changes to three cross-

cutting program provisions in the HOME rule. First, this interim rule

amends Sec. 92.257, ``Religious organizations,'' to remove a reference

relating to control of wholly secular entities established by

``primarily religious organizations'' to rehabilitate or construct

housing which will therefore not be owned by such primarily religious

organizations. The Department recognizes the important role served by

religious groups in providing lower income housing. This change

conforms the rule to the same principles and tests applied in the

Community Development Block Grant regulations at Sec. 570.200(j) and in

the section 202 program for elderly housing assistance. This

clarification is intended to indicate the availability of no lesser

role in the HOME program for entities established by a ``primarily

religious organization,'' a term equivalent to what the United States

Supreme Court describes as a ``pervasively sectarian institution,'' one

in which ``religion is so pervasive that a substantial portion of its

functions are subsumed in the religious mission.'' Hunt v. McNair, 413

U.S. 734, 743 (1973).

Second, this interim rule revises Sec. 92.353(e) to set out the

requirement that HOME participating jurisdictions must comply with the

requirements of a Residential Antidisplacement and Relocation

Assistance Plan (Plan). The change reflects a statutory amendment to

the Comprehensive Housing Affordability Strategy made by Section 220(b)

of the Housing and Community Development Act of 1992. A participating

jurisdiction with a Community Development Block Grant (CDBG) must

follow a Plan identical to its CDBG Plan. A participating jurisdiction

that is not a CDBG grantee must follow a Plan that meets the

requirements of the applicable CDBG regulation (24 CFR 570.606(c) for a

local jurisdiction and Sec. 570.488(c) for States). A certification

requirement related to this provision is also added to

Sec. 92.10(c)(4). On July 1, 1994, HUD published a proposed rule at 24

CFR part 43 (59 FR 34300) describing proposed changes to Plan

requirements. The deadline for public comments was August 1, 1994.

Finally, this interim rule also amends Sec. 92.354(a)(2), regarding

Davis-Bacon Act applicability. The change is intended to make clear

that construction contracts covering 12 or more units, disregarding the

number of projects involved, are subject to Davis-Bacon requirements.

Also, dividing a single project into multiple construction contracts

for purposes of avoiding Davis-Bacon requirements is not permitted.

III. Findings and Certifications

Justification for Interim Rulemaking

The Department has determined that this interim rule should be

adopted without the delay occasioned by requiring prior notice and

comment. This interim rule simply constitutes the implementation of

statutory language with the exercise of little or no discretion on the

part of the Department and makes a number of clarifying changes to

existing provisons. As such, prior notice and comment are unnecessary

under 24 CFR Part 10. This rule is being published as an interim rule

and not as a final rule because the HOME program regulation at 24 CFR

part 92 has not yet been issued as a final rule.

Environmental Review

A Finding of No Significant Impact with respect to the environment

has been made in accordance with HUD regulations at 24 CFR part 50,

which implement section 102(2)(C) of the National Environmental Policy

Act of 1969. The Finding of No Significant Impact is available for

public inspection between 7:30 a.m. and 5:30 p.m. weekdays in the

Office of the Rules Docket Clerk.

Regulatory Planning and Review

This interim rule has been reviewed and approved in accordance with

Executive Order 12866, issued by the President on September 30, 1993

(58 FR 51735, October 4, 1993). Any changes to the interim rule

resulting from this review are available for public inspection between

7:30 a.m. and 5:30 p.m. weekdays in the Office of the Rules Docket

Clerk.

Impact on Small Entities

In accordance with the Regulatory Flexibility Act (5 U.S.C.

605(b)), the undersigned hereby certifies that this interim rule does

not have a significant economic impact on a substantial number of small

entities, because jurisdictions that are statutorily eligible to

receive formula allocations are relatively larger cities, counties or

States.

Regulatory Agenda

This interim rule was not listed in the Department's Semiannual

Agenda of Regulations published on April 25, 1994 (59 FR 20424) under

Executive Order 12866 and the Regulatory Flexibility Act.

Federalism Impact

The General Counsel has determined, as the Designated Official for

HUD under section 6(a) of Executive Order 12612, Federalism, that this

interim rule does not have federalism implications concerning the

division of local, State, and federal responsibilities. While the HOME

Program interim rule amended by this interim rule was determined to be

a rule with federalism implications and the Department submitted a

Federalism Assessment concerning the interim rule to OMB, this amending

rule only makes limited adjustments to the interim rule and does not

significantly affect any of the factors considered in the Federalism

Assessment for the interim rule.

Impact on the Family

The General Counsel, as the designated official under Executive

Order 12606, The Family, has determined that this interim rule would

not have significant impact on family formation, maintenance, and

general well-being. Assistance provided under this interim rule can be

expected to support family values, by helping families achieve security

and independence; by enabling them to live in decent, safe, and

sanitary housing; and by giving them the means to live independently in

mainstream American society. This interim rule would not, however,

affect the institution of the family, which is requisite to coverage by

the Order. Even if this interim rule had the necessary family impact,

it would not be subject to further review under the Order, since the

provision of assistance under this interim rule is required by statute,

and is not subject to agency discretion.

The Catalog of Federal Domestic Assistance Number for the HOME

Program is 14.239.

List of Subjects

24 CFR Part 58

Environmental protection, Community development block grants,

Environmental impact statements, Grant programs--housing and community

development, Reporting and recordkeeping requirements.

24 CFR Part 92

Administrative practice and procedure, Grant programs--housing and

community development, Grant programs--Indians, Indians, Low and

moderate income housing, Manufactured homes, Rent subsidies, Reporting

and recordkeeping requirements.

Accordingly, the Department amends parts 58 and 92 of title 24 of

the Code of Federal Regulations as follows:

PART 58--ENVIRONMENTAL REVIEW PROCEDURES FOR RECIPIENTS ASSUMING

HUD RESPONSIBILITIES

1. The authority citation for part 58 is revised to read as

follows:

Authority: 42 U.S.C. 1437o(i)(1) and (2), 3535(d), 4332, 4852,

5304(g), 11402, and 12838.

2. Section 58.1 is amended by:

a. Revising the second sentence in the introductory text of

paragraph (c);

b. Removing the word ``and'' at the end of paragraph (c)(3);

c. Removing the period at the end of paragraph (c)(4) and adding

``; and'' ; and

d. Adding a new paragraph (c)(5), to read as follows:

Sec. 58.1 Purpose, scope and applicability.

* * * * *

(c) Applicability. * * * Programs and activities subject to this

part include:

* * * * *

(5) Grants to States and units of general local government for

abatement of lead-based paint and lead dust hazards pursuant to title

II of the Departments of Veterans Affairs and Housing and Urban

Development, and Independent Agencies Appropriations Act, 1992, and

grants for lead-based paint hazard reduction under Section 1011 of the

Housing and Community Development Act of 1992, in accordance with

section 1011(o) (42 U.S.C. 4852(o)).

3. In Sec. 58.2, paragraph (a)(4) is revised to read as follows:

Sec. 58.2 Terms, abbreviations and definitions.

(a) * * *

(4) Recipient means:

(i) A State that does not distribute HUD assistance under the

program to a unit of general local government;

(ii) Guam, the Northern Mariana Islands, the Virgin Islands,

American Samoa, the Trust Territory of the Pacific Islands;

(iii) A unit of general local government; or

(iv) An Indian tribe.

* * * * *

4. In Sec. 58.4, the second sentence of paragraph (c)(1) is revised

to read as follows:

Sec. 58.4 HUD legal authority.

* * * * *

(c) * * *

(1) * * * The State must submit the certification and RROF to HUD.

* * * * *

5. In Sec. 58.77, a new paragraph (d) is added to read as follows:

Sec. 58.77 Effect of approval of certification.

* * * * *

(d) Responsibility for monitoring and training. (1) At least once

every three years, HUD intends to conduct in-depth monitoring of the

environmental activities performed by recipients that have assumed

responsibilities for environmental review, decisionmaking, and action

under this part. Limited monitoring of these environmental activities

will be conducted during each program monitoring site visit. If through

limited or in-depth monitoring of these environmental activities or by

other means, HUD becomes aware of any environmental deficiencies, HUD

may take one or more of the following actions:

(i) In the case of problems found during limited monitoring, HUD

may schedule in-depth monitoring at an earlier date or may schedule in-

depth monitoring more frequently;

(ii) HUD may require attendance by recipient staff at HUD sponsored

or approved training, which will be provided periodically at various

locations around the country;

(iii) HUD may refuse to accept the certifications of environmental

compliance on subsequent grants;

(iv) HUD may suspend or terminate the recipient's assumption of the

environmental review responsibility;

(v) HUD may initiate sanctions, corrective actions or other

remedies provided in program regulations or agreements or contracts

with the recipient.

(2) HUD's responsibilities and action under paragraph (d)(1) of

this section shall not be construed to limit or reduce any

responsibility assumed by a recipient with respect to any particular

release of funds under this part. Whether or not HUD takes action under

paragraph (d)(1) of this section, the Certifying Officer remains the

responsible Federal official under Sec. 58.17 with respect to projects

and activities for which the Certifying Officer has submitted a RROF

and certification under this part.

PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM

6. The authority citation for part 92 continues to read as follows:

Authority: 42 U.S.C. 3535(d) and 12701-12839.

7. In Sec. 92.2, the definition of ``First-time homebuyer'' is

removed, and the definition of ``State'' is revised to read as follows:

Sec. 92.2 Definitions.

* * * * *

State means any State of the United States, the District of

Columbia, the Commonwealth of Puerto Rico, or any agency or

instrumentality thereof that is established pursuant to legislation and

designated by the chief executive officer to act on behalf of the State

with regard to the provisions of this part.

* * * * *

8. Section 92.4 is redesignated Sec. 92.5, and a new Sec. 92.4 is

added to read as follows:

Sec. 92.4 Suspension of requirements for disaster areas.

The Secretary may suspend any HOME statutory requirements (except

for those related to public notice of funding availability,

nondiscrimination, fair housing, labor standards, environmental

standards, and low-income housing affordability) or regulatory

requirements, for HOME funds designated by a recipient to address the

damage in an area for which a disaster is declared under title IV of

the Robert T. Stafford Disaster Relief and Emergency Assistance Act.

9. In Sec. 92.61, paragraph (b)(4) is revised to read as follows:

Sec. 92.61 Program description and housing strategy.

* * * * *

(b) * * *

(4) If the insular area intends to use HOME funds for homebuyers,

the guidelines for resale or recapture as required in

Sec. 92.254(a)(4);

* * * * *

10. In Sec. 92.150, paragraphs (b)(5) and (c)(4) are revised to

read as follows:

Sec. 92.150 Submission of program description and certifications.

* * * * *

(b) * * *

(5) If the participating jurisdiction intends to use HOME funds for

homebuyers, the guidelines for resale or recapture must be described as

required in Sec. 92.254(a)(4);

* * * * *

(c) * * *

(4) A certification that the participating jurisdiction:

(i) Is following a Residential Antidisplacement and Relocation

Assistance Plan as described in Sec. 92.353(e);

(ii) Will comply with the Uniform Relocation Assistance and Real

Property Acquisition Policies Act of 1970 and implementing regulations

at 49 CFR part 24; and

(iii) Will comply with the requirements in Sec. 92.353.

* * * * *

11. In Sec. 92.205, paragraph (a)(1) is revised to read as follows:

Sec. 92.205 Eligible activities: General.

(a) * * *

(1) HOME funds may be used by a participating jurisdiction to

provide incentives to develop and support affordable rental housing and

homeownership affordability through the acquisition (including

assistance to homebuyers), new construction, reconstruction, or

moderate or substantial rehabilitation of non-luxury housing with

suitable amenities, including real property acquisition, site

improvements, conversion, demolition, and other expenses, including

financing costs, relocation expenses of any displaced persons,

families, businesses, or organizations, to provide tenant-based rental

assistance, including security deposits; to provide payment of

reasonable administrative and planning costs; and to provide for the

payment of operating expenses of community housing development

organizations. The housing must be permanent or transitional housing,

and includes permanent housing for disabled homeless persons, and

single-room occupancy housing. The specific eligible costs for these

activities are set forth in Secs. 92.206 through 92.209.

* * * * *

12. In Sec. 92.206, paragraph (b) is revised to read as follows:

Sec. 92.206 Eligible costs.

* * * * *

(b) Acquisition costs. Costs of acquiring improved or unimproved

real property, including acquisition by homebuyers.

* * * * *

13. In Sec. 92.211, paragraph (a)(2) is revised to read as follows:

Sec. 92.211 Tenant-based rental assistance.

(a) * * *

(2) The participating jurisdiction selects families in accordance

with written tenant selection policies and criteria that are consistent

with the purposes of providing housing to very low- and low-income

families and are reasonably related to preference rules established

under section 6(c)(4)(A) of the Housing Act of 1937 (42 U.S.C. 1437 et

seq.). Selection policies and criteria meet the ``reasonably related''

requirement if at least 50% of the families assisted qualify, or would

qualify in the near future without tenant-based rental assistance, for

one of the three Federal preferences under section 6(c)(4)(A) of the

Housing Act of 1937. These are families that occupy substandard housing

(including families that are homeless or living in a shelter for

homeless families); families that are paying more than 50 percent of

(gross) family income for rent; or families that are involuntarily

displaced. The participating jurisdiction may select low-income

families currently residing in units that are designated for

rehabilitation or acquisition under the participating jurisdiction's

HOME program without requiring that the family meet the written tenant

selection policies and criteria. Families so selected may use the

tenant-based assistance in the rehabilitation or acquired unit or in

other qualified housing.

* * * * *

14. In Sec. 92.214, paragraph (a)(7) is revised to read as follows:

Sec. 92.214 Prohibited activities.

(a) * * *

(7) Provide assistance (other than tenant-based rental assistance

or assistance to a homebuyer to acquire housing previously assisted

with HOME funds) to a project previously assisted with HOME funds

during the period of affordability established by the participating

jurisdiction under Sec. 92.502 or Sec. 92.504. However, additional HOME

funds may be committed to a project up to one year after project

completion (see Sec. 92.502), but the amount of HOME funds in the

project may not exceed the maximum per-unit subsidy amount established

under Sec. 92.250.

* * * * *

15. In Sec. 92.216, paragraphs (a)(1) and (a)(2) are revised to

read as follows:

Sec. 92.216 Income targeting: Tenant-based rental assistance and

rental units--Initial eligibility determination and reexamination.

(a) * * *

(1) Not less than 90 percent of:

(i) The families receiving such rental assistance are families

whose annual incomes do not exceed 60 percent of the median family

income for the area, as determined and made available by HUD with

adjustments for smaller and larger families (except that HUD may

establish income ceilings higher or lower than 60 percent of the median

for the area on the basis of HUD's findings that such variations are

necessary because of prevailing levels of construction cost or fair

market rent, or unusually high or low family income) at the time of

occupancy or at the time funds are invested, whichever is later; or

(ii) The dwelling units assisted with such funds are occupied by

families having such incomes; and

(2) The remainder of:

(i) The families receiving such rental assistance are households

that qualify as low-income families (other than families described in

paragraph (a)(1) of this section) at the time of occupancy or at the

time funds are invested, whichever is later; or

(ii) The dwelling units assisted with such funds are occupied by

such households.

* * * * *

16. In Sec. 92.218, paragraph (a) is revised to read as follows:

Sec. 92.218 Amount of matching contribution.

(a) Each participating jurisdiction must make contributions to

housing that qualifies as affordable housing under the HOME program,

throughout a fiscal year. The contributions must total not less than 25

percent of the funds drawn from the jurisdiction's HOME Investment

Trust Fund Treasury account in that fiscal year.

* * * * *

17. In Sec. 92.252, paragraph (a)(2)(iii) is revised, to read as

follows:

Sec. 92.252 Qualification as affordable housing and income targeting:

Rental housing.

(a) * * *

(2) * * *

(iii) If the rent determined under this paragraph (a)(2) is higher

than the applicable rent under (a)(1) of this section, then the

applicable maximum rent for units under this paragraph would be that

calculated under (a)(1) of this section.

* * * * *

18. In Sec. 92.254, paragraphs (a)(3), (a)(4)(ii)(C) and

(a)(4)(ii)(D) are revised, to read as follows:

Sec. 92.254 Qualification as affordable housing: homeownership.

(a) * * *

(3) Is purchased within 36 months if a lease-purchase agreement in

conjunction with a homebuyer program is used to acquire the housing;

(4) * * *

(ii) * * *

(C) The HOME investment that is subject to recapture is the HOME

assistance that enabled the homebuyer to buy the dwelling unit. This

includes any HOME assistance, whether a direct subsidy to the homebuyer

or a construction or development subsidy, that reduced the purchase

price from fair market value to an affordable price. The recaptured

funds must be used to carry out HOME-eligible activities. If no HOME

funds will be subject to recapture, the provisions at

Sec. 92.254(a)(4)(i) apply.

(D) Upon recapture of the HOME funds used in a single-family,

homebuyer project with two to four units, the affordability period on

the rental units may be terminated at the discretion of the

participating jurisdiction.

* * * * *

19. Section 92.257 is revised to read as follows:

Sec. 92.257 Religious organizations.

HOME funds may not be provided to primarily religious

organizations, such as churches, for any activity including secular

activities. In addition, HOME funds may not be used to rehabilitate or

construct housing owned by primarily religious organizations or to

assist primarily religious organizations in acquiring housing. However,

HOME funds may be used by a secular entity to acquire housing from a

primarily religious organization, and a primarily religious entity may

transfer title to property to a wholly secular entity and the entity

may participate in the HOME program in accordance with the requirements

of this part. The entity may be an existing or newly established

entity, which may be an entity established by the religious

organization. The completed housing project must be used exclusively by

the owner entity for secular purposes, available to all persons

regardless of religion. In particular, there must be no religious or

membership criteria for tenants of the property.

20. In Sec. 92.352, paragraph (b) is revised to read as follows:

Sec. 92.352 Environmental review.

* * * * *

(b) Responsibility for review. (1) The jurisdiction (e.g., the

participating jurisdiction or state recipient) or insular area must

assume responsibility for environmental review, decisionmaking, and

action for each activity that it carries out with HOME funds, in

accordance with the requirements imposed on a recipient under 24 CFR

part 58. In accordance with 24 CFR part 58, the jurisdiction or insular

area must carry out the environmental review of an activity and obtain

approval of its request for release of funds before HOME funds are

committed for the activity.

(2) A state participating jurisdiction must also assume

responsibility for approval of requests for release of HOME funds

submitted by state recipients.

(3) HUD will perform the environmental review, in accordance with

24 CFR part 50, for a competitively awarded application for HOME funds

submitted to HUD by an entity that is not a jurisdiction.

21. In Sec. 92.353, paragraph (e) is revised to read as follows:

Sec. 92.353 Displacement, relocation, and acquisition.

* * * * *

(e) Residential antidisplacement and relocation assistance plan.

Each participating jurisdiction shall comply with the Residential

Antidisplacement and Relocation Assistance Plan requirements described

at 24 CFR 570.606(c), or, in the case of a State-administered HOME

Program, the requirements at 24 CFR 570.488(c). These policies require

one-for-one replacement of low/moderate-income housing demolished or

converted to another use and the provision of relocation assistance to

lower income persons displaced by such conversion or by demolition.

* * * * *

22. In Sec. 92.354, paragraph (a)(2) is revised to read as follows:

Sec. 92.354 Labor.

(a) * * *

(2) The contract for construction must contain these wage

provisions if HOME funds are used for any project costs (as defined in

Sec. 92.206), including construction or nonconstruction costs, of

housing with 12 or more HOME-assisted units. When HOME funds are only

used to assist homebuyers to acquire single-family housing, and not for

any other project costs, the wage provisions apply to the construction

of the housing if there is a written agreement with the owner or

developer of the housing that HOME funds will be used to assist

homebuyers to buy the housing and the construction contract covers 12

or more housing units to be purchased with HOME assistance. The wage

provisions apply to any construction contract that includes a total of

12 or more HOME-assisted units, whether one or more than one project is

covered by the construction contract. Once they are determined to be

applicable, the wage provisions must be contained in the construction

contract so as to cover all laborers and mechanics employed in the

development of the entire project, including portions other than the

assisted units. Arranging multiple construction contracts within a

single project for the purpose of avoiding the wage provisions is not

permitted.

* * * * *

23. Section 92.633 is revised to read as follows:

Sec. 92.633 Environmental review.

The Indian tribe must assume responsibility for environmental

review, decisionmaking, and action for each activity that it carries

out with HOME funds, in accordance with the requirements imposed on a

recipient under 24 CFR part 58. In accordance with 24 CFR part 58, the

Indian tribe must carry out the environmental review of an activity and

obtain approval of its request for release of funds before HOME funds

are committed for the activity.

Dated: August 18, 1994.

Henry G. Cisneros,

Secretary.

[FR Doc. 94-20866 Filed 8-25-94; 8:45 am]

BILLING CODE 4210-32-P